Spot gold was up 0.3 percent at $1,266.81 an ounce by 1400 GMT, while US gold futures for June delivery were up $2.30 at $1,268.20. "At this point, $1,300 looks like it's more appealing for gold than $1,100," ING analyst Hamza Khan said. "A bit more weakness in the dollar, combined with more movements around North Korea, could be the situation that sets the stage for higher gold prices."
Jitters over tensions in the Korean peninsular and the threat of a strong showing from an anti-European Union candidate in the French elections helped drive gold higher last week. However, it is now on track for its biggest weekly drop in seven as fading concerns over Korea and a strong showing in the first round of the French vote from centrist candidate Emmanuel Macron sharpened risk appetite, pressuring gold.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 0.1 percent to 853.36 tonnes on Thursday. Holdings are down by more than 6 tonnes since Tuesday. Spot gold was down 1.3 percent from last Friday's level, its biggest weekly loss since early March, though its descent has slowed. "Most of the correction should be done by now," Commerzbank analyst Daniel Briesemann said. "We see good support at this level. There are a lot of uncertainties remaining."
"The high-risk appetite at the beginning of the week seems to have abated, at least for now. This has definitely helped support the gold price, and the dollar is supportive as well." Banks remain stubbornly cautious on gold's price prospects this year in spite of a strong first-quarter performance, a Reuters poll showed on Friday, as the prospect of higher interest rates take the shine off the metal.
Among other precious metals, silver was down 0.1 percent at $17.20 an ounce, while platinum was 0.3 percent higher at $944.80. Palladium was up 1.3 percent at $825.95, having touched a two-year high of $827.90. It was the only weekly gainer among the precious metals, set to finish the week with a 4.2 percent rise. The Reuters poll predicted palladium would register its strongest year on record in 2018.